SRJIS/BIMONTHLY/ PREETI KAUSHAL (1884-1891)

RURAL MARKETING IN INDIA: ITS POTENTIAL AND CHALLENGES

Preeti Kaushal
Assistant Professor in Commerce, GGDSD College Kheri Gurna

Abstract
Rural India is becoming one of the attractive markets for the corporates in the recent times.
Urban markets are flooded withmany different consumer products, thus Marketers now find it
difficult to generate heavy income flows from these markets. On the other hand rural income
graph is on a rise, which has given huge scope to the corporates to tap this market where 70% of
India resides. The study aims to provide information on how the corporates carry out the
marketing process and the reasons for the paradigm shift from Urban to Rural markets. The
study also reveals the challenges faced by the corporates while marketing their products in Rural
areas.
Keywords: Rural Markets, Consumer products, Potential

Scholarly Research Journal's is licensed Based on a work at www.srjis.com

Introduction
According to census 2011, For the first time since Independence, the absolute increase in
population is more in urban areas that in rural area. Rural population is 83.3 crore. The
improvement in literacy rate in rural area is two times that in urban areas. The rural urban
literacy gap which was 21.2 percentage points in 2001, has come down to 16.1 percentage points
in 2011census. Number of Rural Units (or Villages) in India: Census 2001 6,38,588 Census
2011 6,40,867 Increase: 2,279.
The corporates are looking for new prospects and possibilities, as they are witnessing a decline in
their growth rates in urban markets due to market saturation and they have a large, untapped
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rural Indian market. The motivating force for this is young pepole who are educated, have access
to technology and have willingness to change. The overall growth of economy has resulted into
substantial rise in the purchasing power of the rural customers. A survey done by India's best
economic research entity, National Council for Applied Economic Research (NCAER) shows
that rise in rural incomes is keeping pace with urban incomes. The rural middle class is growing
at 12% as compared to 13% in Urban area.
Objectives
The objectives of this study are to have an understanding of Rural markets, its potential for the
marketers, reasons of shift from Urban markets to Rural markets.
Methodology
Descriptive research was done by getting schedule filled from over 65 people from the area of
Jahnsla near Rajpura.Secondary data is also collected from various market players.
Literature Review
The immense potential of the rural customerscan be realized if the managersunderstand this
market. The vastuntapped needs of the rural consumers, the developingrural economy and the
increasedpenetration of media and brand awareness makes this market extremely attractive to
marketers (Goswami, 2009)
If we look at the projected annual size of the rural market it would tell us the true potential of this
untouched market. The growth statistics exibit large potentials for FMCG and Consumer
Durables for the Indian Rural markets (Paninchukunnath, 2010)
Rural Marketing is defined as a function that manages all activities involved in assessing,
stimulating and converting the purchasing power of rural consumers into an effective demand for
specific products & services and moving these products & services to the people in rural areas to
create satisfaction and a better standard of living and thereby achieving organizational goals
(Iyer, 2010)
(Kalotra,2013) Rural customers are increasingly becoming brand conscious as well as price and
discounts. There a high potential in rural India but exists major differences between the existing
and the desirable levels of rural marketing, has to be improve
(Gomathi,2013) rural marketing process is playingvital role in marketing the products and
services of the companies by using customers as the major marketing sources without
implementing marketing plans and techniques. Finally,rural marketing process can be used as an
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alternate for traditional marketing process in order to create brand awareness among customers
and improve the sales of company products
(Kumar, Dangi,2013) rural India offers huge opportunities which companies can tap for their
growth and development. However, Companies face many challenges in tackling the rural
markets. 833 million people reside in India as compared to 377 millions in urban India so vast
untapped opportunities are available in rural India.
What attracts the companies to Rural markets
About 833 million people reside in rural area whereas 377 million people in urban area
53% of FMCGs products and 59% of consumer durables are sold in the rural markets
The total annual market size for FMCG products is 65000 crore, Consumer durables is 5000
Crore.46% of soft drinks sales come from rural areas. 49% of motorcycles sales come from rural
area .42 million rural households availing banking services in comparison to urban households
.Indian rural market is bigger than the market of USA.There is a significant increase in Rural
consumers disposable income and level of literacy thus increase in demand of branded products.
Rural families spend on weddings, pilgrimages, constructions etc. Their aspirations are
increasing. Pardeep Kashyap, CEO, MART, says The rural India has cash in hand and is not
bound by EMIs or loans
Challenges in Rural Markets
Rural markets have huge potential instore in terms of creating demands for the marketers.
There are various challenges that marketers face while theydiscover rural markets. With Rural
markets becoming a hot spot for the marketers various challenges that these markets pose needs
to be taken account for. The major challenges faced are Distribution costs and non-availability of
retailoutlets. The success of every company willing to launch its products in rural areas depends
highly on how they manage their distribution and retailing activities. Replicating the marketing
activities of urban areas to rural areas results in failure.
The rural markets have unique tastes, consumption patterns, demands, spending ability. All these
things need to be taken care while developing a marketing plan for rural customers.
social dynamics needs to be understood by marketers before planning any launch of the product.
The other challenges in rural marketing are the poor infrastructure, lack of awareness among
customers, lack of understanding, physical distribution issues, channel management.

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Analysis and interpretation:

Table no:1: Age of respondents
Age group
Less than 20
21-30 years
31-40 years
41-50 years
50 years and above
Total

No of respondents
11
10
22
12
13
68

%age of respondents
16.1
14.7
32.3
17.6
19.1
100

The maximum number of respondents i.e 32% lie between the age group of 31-40 years for the
survey undertaken in Rural area
Table no 2: Gender
Gender
Male
Female
Total

No of respondents
45
23
68

%age of respondents
66.1
33.8
100

66% of the respondents in this survey are male this shows the dominance of male population in
rural areas
Table no 3: Monthly Income:
Monthly Income
Less than Rs. 2000
Rs. 2001 - Rs. 5000
Rs. 5001 - Rs. 8000
Rs. 8001 - Rs. 10000
Rs. 10001 Rs. 15000
Rs. 15001 & Above
Total

No of respondents
5
18
14
14
15
2
68

%age of respondents
7
26
21
21
22
3
100

Maximum number of Rural Customers fall in the income bracket between 2000 to 15000 per
month. This states that Rural consumers are potential buyers for many durable and non durable
consumer products.
Table no. 4: Selected Methodology for Interface
RESPONSE

No. of
Respondents
Electronic Media
5
Mobile
3
Radio
10
Advertisements
21
Print Media; Newspapers/magazines 9
Word of mouth
15
Role play; Skits and plays
5
Total
68

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% of
Respondents
7
4
15
31
13
22
7
100

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31% of Rural customers are most attracted to the advertisements as it creates awareness about
the brand and the product.22% of rural customers form their perception about the product
according to peer group likings and dislikings
Table No. 5: Purchase decisions
Response

No. of Respondents % of
Respondents
Personal
12
18
Group Discussion (small) 24
35
Mass
32
47
Total
68
100

Rural customers make purchase decisions based on the masses decision to buy the product.
47% of the customers believe in consulting the peer group before making any purchases.
Table No. 6: Language impact
Response

No. of Respondents % of
Respondents
Regional
46
68
National
7
10
Both combined 15
22
None of these
0
0
Total
68
100

68% of the rural customers want the marketers to communicate their message in their regional
language. So for successful marketing in these areas the marketers must develop a different
brand awareness program catering to the needs of these people.
Table No. 7:Purchase Impact
Response

No. of Respondents % of
Respondents
Pricing/Discounts 21
31
Brand
27
40
Language
5
7
Content
5
7
Tagline
10
15
Total
68
100

40% of the rural customers make purchases according to the brand. As earlier prices and
discounts are not the major determinant in rural customers buying pattern. This is due to
increased disposable income.
Table No. 8: Purchasing Decisions
Response No. of Respondents % of
Respondents
Self
31
46
Parents
5
7
Spouse
22
32
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Children
Total

10
68

15
100

46% of the respondents are self driven for making any purchase decision followed by spouse. So
marketers must target individual aswel as spouse and children as per the needs of the product.
Table No. 9: Adaptability to New product/brand
Response

No. of Respondents % of
Respondents
No impact- maintaining statuesque 23
34
Contemplating something new
5
7
Improving upon the existing ones
12
18
Receiving positive feedback
28
41
Total
68
100

This reveals that rural customers are reluctant to try new products. So marketers must advertise
in a manner that triggers their interest and needs.
Conclusion
1. The analysis explains the type purchasing pattern among the rural customers. The rural market
is dominated by male buyers who take the major purchasing decisions
2.Rural customers are more intrigued by electronic means of advertisement or communication
3. Its a feel good factor for rural cutomers if they understand that organisation values their
association
4. For the marketing activity to be successful the marketers must use the regional language to
communicate with rural customers
5. Along with brand awareness rural customers are also sensitive about the value for money they
get and the discunts
6. Rural customers are highly influenced by peer group in taking any buying decision.
7. It takes time for rural customers to get use to new product unless something triggers their
decision
It can be concluded from the above study that there is a huge potential in rural India . The
marketers need to understand a clear difference in the way product are to be marketed in rural
areas as compared to urban.
References
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market. Interscience Management Review, 2(3), 23-28.
Kotni, VV D.P. (2012). Prospect and problems of Indian rural markets. ZENITH International Journal of
Business Economics and Management Research, 2(3), 200-213.

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